UPS Trafficks in Business-Process Optimization

Toyota has long been considered the king of the optimized business process, with its emphasis on continual improvement and eliminating inefficiency. The auto manufacturer also makes good use of technology to support its laser-like focus on process, as detailed in a Baseline article from last year.

But there may be another contender for the throne in UPS.

According to the New York Times, the company employs a "package flow" software program that maps routes for its drivers designed to get packages delivered to their destinations with the utmost efficiency. One example: The software largely eliminates time-killing, fuel-wasting left turns -- except in cases where drivers would be sent far out of their way.

A company spokeswoman credits the software with helping drivers shave 28.5 million miles off their routes in 2006, saving some three million gallons of gas and reducing CO2 emissions by 31,000 metric tons.

Now that's efficiency -- even better, it results in an improved bottom line.

In my recent interview with Mike Berger, director of marketing for Xora, a company that sells software with a route optimization feature that sounds similar to the one used by UPS, he describes how Xora's application works:

Let's say you are running a regional mattress delivery operation with six stores, three distribution centers and 15 trucks, and you have on average 100 deliveries per day. This enables you to take all of those delivery locations -- or service locations, if you are in the service industry -- and import them into the application, XRoutes. It will automatically use various algorithms to divvy up those routes intelligently. So it will tell you: "These six delivery locations will be done by this truck, and in this order." It also allows you to print out manifests for the drivers and the warehouse workers so they know they should pack up that first delivery last on the truck so it's easy to pull off, for example.

The stops are programmed into drivers' mobile phones, and they can use the phone to indicate when they've completed a scheduled task and are ready to move on to the next one. Monitoring their progress allows dispatchers to keep customers apprised of any expected delays.

I agree that both Toyota and UPS do an amazing job of streamlining their core business processes. The founders of Toyota established approaches that started the Lean methodology that is popular today.UPS has a history of using Industrial Engineering time studies to shave every second off the operations that are performed millions of times a day. They even train drivers on which foot to step onto the package car in order to be most efficient. UPS invested over a $1 billion to automate a global package sorting hub that sorts over 300,000 packages and hour. http://money.howstuffworks.com/ups1.htmI spent 17 years learning about efficiency at UPS. Now I use those principles to deliver dramatic Business Process Improvement to business, government and non-profit organizations.Jack BrowniSYS Consultingjack@myisys.com Reply